Limtex, the auto companies are suffering because the world capacity is close to 80 MM cars annually, while the world demand is between 35 to 50 MM cars (depending on "good times" or "bad times"). That has nothing to do with the Fed's, Daewoo is slashing its work force, because it was no longer competitive, but the only solution is to reduce capacity.
Sales of semi this year are going to be around $205 B, but the industry spent close to $50 B on Cap-ex, that also is leading to excess capacity, and thus a down turn. That is the way capitalism works, money flows to "profitable ventures", until these suffer from overcapacity and then there is a retrenchment. That what happened with the Net. In 1998/99, It was impossible to meet with VC's unless you brought tp them a dot.com company, it got to be excessive, and now we pay the piper.Even Aus agree that SNDK at $160 was overvalued, I believe that at $30 it is fairly valued (for bear market conditions), but unfortunately, bear markets bring about "uncommon" value, so I would not exclude the possibility that my estimate is too high and actually see SNDK sell at a low premium of 50% to book at the nadir of this retrenchment. Many companies are already selling under book.
Zeev |
